Humber/Ontario Real Estate Course 2 Exam Practice

What is typically performed during the review of a residential mortgage application by a lender?

1. An exhaustive property inspection

2. A detailed income analysis

3. A credit check

4. A market analysis

5. A legal title search

6. A demographic assessment

The correct answer is: A credit check

During the review of a residential mortgage application by a lender, a credit check is typically performed to assess the applicant's creditworthiness and financial responsibility. This process involves the lender examining the applicant's credit history, looking at factors such as the applicant's payment history, outstanding debt, length of credit history, types of credit used, and new credit inquiries. By conducting a credit check, the lender can determine the level of risk associated with granting a mortgage to the applicant and make an informed decision on whether to approve the mortgage application. The other options are not typically performed during the review of a residential mortgage application by a lender: - An exhaustive property inspection is usually conducted by a home inspector, not the lender. - A detailed income analysis is important but is usually part of the underwriting process after the initial application review. - A market analysis is usually conducted by a real estate agent or appraiser. - A legal title search is performed by a lawyer or a title company to ensure there are no issues with the property's title. - A demographic assessment is not directly related to the review of a mortgage application.